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Radiation technology company Mirion (NYSE:MIR) missed analysts' expectations in Q2 CY2024, with revenue up 5% year on year to $207.1 million. It made a GAAP loss of $0.06 per share, improving from its loss of $0.14 per share in the same quarter last year.
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Mirion (MIR) Q2 CY2024 Highlights:
- Revenue: $207.1 million vs analyst estimates of $210.8 million (1.7% miss)
- EBITDA Guidance for the full year is $200 million at the midpoint, above analyst estimates of $198.1 million
- Gross Margin (GAAP): 47%, up from 44.7% in the same quarter last year
- Free Cash Flow of $4.1 million is up from -$6.8 million in the previous quarter
- Market Capitalization: $2.18 billion
With its monitoring devices installed on spacecraft, Mirion (NYSE:MIR) offers radiation technology to government agencies, healthcare providers, and industrial companies.
Inspection InstrumentsMeasurement and inspection instrument companies may enjoy more steady demand because products such as water meters are non-discretionary and mandated for replacement at predictable intervals. In the last decade, digitization and data collection have driven innovation in the space, leading to incremental sales. But like the broader industrials sector, measurement and inspection instrument companies are at the whim of economic cycles. Interest rates, for example, can greatly impact civil, commercial, and residential construction projects that drive demand.
Sales GrowthReviewing a company's long-term performance can reveal insights into its business quality. Any business can have short-term success, but a top-tier one tends to sustain growth for years. Over the last three years, Mirion grew its sales at a weak 4.9% compounded annual growth rate. This shows it failed to expand in any major way and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a stretched historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Mirion's annualized revenue growth of 11.5% over the last two years is above its three-year trend, suggesting its demand recently accelerated. Mirion recent history stands out, especially when considering many similar Inspection Instruments businesses faced declining sales because of cyclical headwinds.
This quarter, Mirion's revenue grew 5% year on year to $207.1 million, missing Wall Street's estimates. We also like to judge companies based on their projected revenue growth, but not enough Wall Street analysts cover the company for it to have reliable consensus estimates.
Operating MarginAlthough Mirion was profitable this quarter from an operational perspective, it's generally struggled over a longer time period. Its expensive cost structure has contributed to an average operating margin of negative 3% over the last four years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out. It's hard to trust that Mirion can endure a full cycle.
Looking at the trend in its profitability, Mirion's annual operating margin decreased by 2.8 percentage points over the last four years. The company's performance was poor no matter how you look at it. It shows operating expenses were rising and it couldn't pass those costs onto its customers.
This quarter, Mirion generated an operating profit margin of 1.1%, up 3.2 percentage points year on year. This increase was encouraging, and since the company's operating margin rose more than its gross margin, we can infer it was recently more efficient with expenses such as sales, marketing, R&D, and administrative overhead.
EPSAnalyzing revenue trends tells us about a company's historical growth, but earnings per share (EPS) growth points to the profitability of that growth–for example, a company could inflate sales through excessive spending on advertising and promotions.
Although Mirion's full-year earnings are still negative, it reduced its losses and improved its EPS by 79.8% annually over the last two years.
In Q2, Mirion reported EPS at negative $0.06, up from negative $0.14 in the same quarter last year. We also like to analyze expected EPS growth based on Wall Street analysts' consensus projections, but there is insufficient data.
Key Takeaways from Mirion's Q2 Results We struggled to find many strong positives in these results, but a bright spot was that its full-year EBITDA guidance slightly topped analysts' estimates. Overall, this was a mediocre quarter for Mirion. The stock remained flat at $10.35 immediately after reporting.
